reconcile customer accounts deemed noncollectable. When allowed by generally accepted accounting principles (GAAP)‚ these two strategies are preferred over direct write-off of bad debt expenses. Percentage of receivables and percentage of sales provide a business with the ability to accurately estimate the expected bad debt losses they will have in each succeeding fiscal reporting period." Percentage of sales method is a good way to see an estimate for bad allowance under the Henerally Accepted Accounting
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Revenue | $ 6‚000 | Operating Expenses | $ (4‚500) | EBIT (Operating Profit) | $ 1‚500 | | | Debt | $ 1‚200 | Equity | $ 8‚800 | Total Capital | $ 10‚000 | Interest rate on debt = 9% Share price = $25 (MV = BV) The firm is contemplating a leveraged share repurchase that would increase the Debt/Total Capital ratio from the current 12% to 60%. Hayfin’s tax rate is 42%. Calculate EPS‚ Times Interest Earned (TIE = EBIT/Interest
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ADM 3350N‚ Winter 2013 Prof. Yuri Khoroshilov Midterm exam IMPORTANT: Please‚ show your work for all questions (excluding multiple-choice questions) Please‚ keep at least 4 decimal points while performing your calculations. Marks will be deducted for rough rounding!!! The exam consists of two parts and one bonus question and is counted out of 40 points. In case your total mark (including the bonus question) exceeds 40 points‚ you will be awarded only 40 points for this exam and no extra
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order to meet their future goals. Background HCA has set target goals in several areas and it is important to identify which goals hold priority: Debt Ratio‚ Growth Rate‚ ROE‚ and Bond Rating. Debt Ratio: Currently‚ HCA is approaching an all time high debt ratio of 70%‚ well above their established target ratio of 60%. The increase in debt ratio has attracted the attention of rating agencies who have clearly stated that in order for HCA to maintain their A bond rating HCA must return to
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Robinson English explains how college students acquire debt‚ penalties‚ bad credit‚ and finical ruins before their graduation from the use of credit cards‚ student loans‚ and poor money management skills. Where college students with no knowledge money management and no financial responsibility unknowingly sign up for numerous credit cards with no limit spending from credit card companies ‚ whom prey on them knowing that they have no idea about the debt they have put themselves into without their money
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The consumer credit influenced the farm foreclosure because since farmers were in debt and they could not pay off their debts‚ they had to foreclose their farms and go to other cities and states to try and find jobs to sustain their families and themselves. Farm foreclosures influenced the banks in the market because the farmers could not pay off their debt and when the banks came around demanding them to pay their debts‚ they could not and had to foreclose and the banks could not get any of their money
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analysis NPV analysis Findings 1. The strengths and draws of debt financing Burns and Irvine can maintain 100% ownership of this company using debt financing. Their obligations are payment of principal and interests and they can run business without considering others’ suggestions‚ that is‚ they own much more freedom of operations. Secondly‚ debt financing can receive the advantage of tax deduction. But the drawbacks of debt financing are obvious. The owner should pay the principal and interests
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collateral to the debts. Large cash flows continued and they decided to put up other unrelated ventures‚ such as a restaurant‚ automobile dealership‚ jewelry shop and many more. Much of the funds available for servicing the debts were used as capital in other businesses. Unfortunately‚ problems bursts as not all the Picaches’ enterprises were doing well‚ in addition‚ devaluation of dollar set in and there is lack of management of the company’s debt problems. To settle the debts‚ the mortgaged properties
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bookkeepers use different names for the same thing? (6 marks) Accumulated profits is profits that are not paid as dividend but is transfered over to the accounts for the next year. Also can be used to reinvest in the core of the business to help pay off debts or to purchase a capital asset. The reasons why accountants and bookkeepers use different names for the same thing is because bookkeepers are the people who record the financial transactions in a business in the form‚ of journals otherwise known as
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things they may not otherwise be able to do. Even though this may be true for some this is not always the case. Credit cards are harmful not only to the American people’s finances but also the economy. Credit cards are the number one reason for personal debt and bankruptcy in America today because of little or no understanding of interest rates and the false sense of security that owning multiple cards gives. Most Americans have the desire for a more convenient lifestyle and credit card companies make
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